2021 has been a stunning year for Ethereum. On the 31st of December 2020, ETH/USD was trading in the low $700 area. As the end of December 2021 approaches, ETH is trading to the north of $4000 per token. That amounts to on-the-year gains of well over 300%. That compares to a year-to-date return for BTC/USD of only around 80% at the time of writing.
ETH/BTC subsequently rose substantially in 2021 from under 0.03 to current levels close to yearly highs around 0.08. As of Friday morning, Ethereum’s total market capitalisation sits at just under $500B, whilst Bitcoin’s is just under $1T.
Nascent Growth in Web3 Drives ETH Outperformance
Cryptocurrency analysts have attributed this year’s outperformance of ethereum versus bitcoin to the former’s greater flexibility when it comes to integration with dApps, DeFi and NFT projects. Indeed, there was an explosion of interest these areas in 2021, as well as in popular meme coins such as Shiba Inu, with most of the projects in these areas built up from the Ethereum blockchain.
“Ethereum, helped by excitement over its potential to power the nascent web3 and the hype surrounding ethereum-based NFTs (non-fungible tokens)… soared this last year, climbing at a faster clip than bitcoin as venture capitalist (VC) companies and investors rush to fund ethereum-based projects,” said BOOX Research.